Billionaire Azim Premji is buying 40 per cent stake in low-cost housing finance company Shubham Housing Finance, through his investment arm, Premji Invest, the Times of India said in a report. Premji Invest is paying Rs 305 crore to the Gurgaon-headquartered company for the 40 per cent stake.
Government’s thrust on affordable housing and its mission to provide housing for all by 2022 has led to a boom in the housing finance segment, mainly in the affordable segment. Many investors are now rushing to encash this opportunity.
“Of the Rs 305 crore that Shubham Housing Finance is getting from Premji Invest, Rs 70 crore would be paid to some of the existing investors in the company while new preference shares worth Rs 235 crore are being issued to the investment arm of Premji. The stakes bought by Premji Invest were purchased from two PE investors — ACCION’s Frontier Investment Group and Saama Capital,” the TOI report quoted Sanjay Chaturvedi, CEO of Shubham Housing Development Finance as saying.
Shubham housing Finance provides housing loan to people who have no formal income. Other than home loans, the company also provides loan against property and home improvement loans.
According to the company’s website, Shubham Housing Finance has 88 branches in 84 cities across 12 states.
The company has disbursed loans worth Rs 1,600 crore so far. According to the TOI report, the company aims to grow its loan portfolio to Rs 5,000 crore in the next four years.
In addition to the equity fund-raising, Shubham Housing Finance has also received debt funding worth about Rs 800 crore from various lenders.